The Finance Ministers of the G20 economies met over the weekend in Scotland. UK Prime Minister Brown, who attended the meeting, won headlines for his support for a tax on financial transactions, the so-called Tobin Tax. This could raise substantial amounts, which could then help fund the low-carbon transition. However, Brown did not win support, notably from the US, and the finance ministers made no significant progress on low-carbon finance:
“The G-20 failed to reach an agreement on how to fund policies to tackle climate change, which may cost as much as 100 billion euros ($148 billion) a year in developing countries alone.”
With the rich economies having met and failed to make progress, today the most vulnerable countries – the Maldives, Kiribati, Bangladesh, Nepal, Vietnam, Ghana, Kenya, Tanzania, Barbados and Bhutan – are meeting in the Maldives. President Nasheed of the Maldives, who made headlines and got on many TV channels recently by holding a cabinet meeting under the sea (which is where his entire country will end up if the climate is not controlled), compared the financial offer from the rich economies to “arriving at an earthquake with a dustpan and brush” (see BBC News/South Asia: Maldives anger at climat inertia).
Better news comes today from the Chief Executive of Siemens, Europe’s largest engineering group. Peter Löscher has said that:
“… green products are the lead technology of the 21st Century. This is the third wave of industrialisation.”
He calls not for more public subsidy, but for “stability for investment and long-term research and development”. This is extremely important, because endless debate about changing the regulatory framework means that investors’ returns become less predictable, which increases the cost of capital. Given the strong possibility of a new government in the UK next year, this is a fairly major concern for energy companies thinking of investing in the UK. On Monday afternoon, the Energy and Climate Secretary, Ed Miliband, is launching several documents on how the low-carbon transition plan will be implemented. The next Climate Answers editorial will assess these.